Wednesday, March 07, 2012

New Guinea Energy sells PNG licence to Exxon, Oil Search for A$14.2 million

New Guinea Energy has sold one of its six Western province,
Papua New Guinea, exploration licences to ExxonMobil and Oil Search for US$15
million (A$14.2 million).

PPL 227 is located next PRL 11 and PDL 8, which
holds the Angore gas field, and is also close to PNG LNG infrastructure.

The sale of PPL 277 reduces New Guinea’s risk and
capital obligations associated with working in the country’s highlands and
provides it with high side exposure and a source of ongoing revenue in the
event of commercial development.

The company is entitled to an additional US$20
million if a petroleum development licence is granted and will receive a
royalty over all revenue if commercial production occurs.

This could be worth between US$48 million and US$312
million to New Guinea depending on discovery of petroleum and its size,
commercial viability of any development, timing of production, LNG pricing at
the time of production and other economic and financing contingencies.

New Guinea has received unsolicited offers for its
acreage in the past and the acquisition of PPL 277 is a clear indicator of the
value of its portfolio.

ExxonMobil subsidiary Esso PNG Exploration and Oil
Search will drill the Trapia-1 well on the border of PPL 277 and PRL 11 during
the first half of 2012.

Trapia is a large structure within PRL 11 close to
the PNG LNG infrastructure and east of the Hides and Angore fields and may
overlap into PPL 277.

New Guinea had recognised this possibility earlier
and had rescheduled a seismic programme originally planned for the third and
fourth quarters in 2011 to the middle of this year to investigate the eastern
Trapia structure.

However, it is not known if the new owners of PPL
277 will proceed with the seismic shoot.

2 comments:

Anonymous, there could be significant reserves of oil/gas but chances are PPL 277 & PRL 11 could feed from the same source since they are quite close together to be separate well sources. Only more seismic and drilling will provide more insight into the prospect

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